“France Proposes Independent Action for Capital Markets Union Project”
France suggested on Friday that European Union member states supporting the establishment of the Capital Markets Union (CMU) should initially proceed independently to expedite a project that has lingered for a decade. Prior to a meeting of EU finance ministers in Ghent, Belgium, French Finance Minister Bruno le Maire emphasized the significance of the CMU in mobilizing private funds for essential investments in artificial intelligence and the shift toward a climate-neutral economy.
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France and Germany estimate that achieving a green and digital transformation in the European economy necessitates an additional 500 billion euros ($541 billion) in private funding annually. This funding can only be facilitated if investing in the currently fragmented European capital markets becomes more accessible.
The slow progress of the CMU project is attributed to the difficulty in finding common ground among the diverse financial systems and legal cultures across the 27 EU member countries.
Le Maire, frustrated by the prolonged process, stated, “I have been trying for more than six years to build a capital markets union. My conclusion is that starting with the 27 member states is a non-starter.” He proposed launching a voluntary CMU initiative, stating that if 3-4 countries initially join, it would form a solid foundation.
While EU finance ministers were expected to issue a statement prioritizing the CMU for the next European Commission, set to take office at the year’s end, Le Maire expressed dissatisfaction, emphasizing the need for decisive actions instead of mere statements.
The Capital Markets Union France project, launched in 2014, aims to facilitate cross-border private capital investments within the EU by harmonizing national rules on bankruptcies, prospectuses, taxation of capital gains, listing requirements, and the disparate tax treatment of debt and equity, among other aspects.
Le Maire’s proposed initiative involves voluntary submission to a single EU supervision of banks, stock exchanges, and asset management, as well as participation in establishing a European savings product (details pending). He stressed the need for voluntary participation in the same securitization rules, though no further details were provided.
German Finance Minister Christian Lindner expressed hope for faster progress but advocated for the involvement of all 27 EU countries. While acknowledging the possibility of bilateral or smaller circle initiatives, Lindner emphasized the ultimate goal of collective advancement for all member states.
